Company Reports

Nestle has faced challenges in delivering volume growth in recent years, largely due to multiple rounds of sizable price increases that have weighed on consumer sentiment, coupled with operational shortcomings. These included underwhelming innovation efforts, inconsistent execution with market share losses in some key business areas, and insufficient marketing investment behind strategic priorities.

Nestlé’s organic sales growth accelerated to 3.7% in the second quarter, but higher restructuring costs and asset write-downs reduced first-half reported net profit by 31.4%. The company also announced a water joint venture with Platinum Equity. Shares were down 6% in early trading on July 23.

Nestlé delivered organic sales growth of 3.5% in the first quarter, driven by 1.2% volume growth and 2.3% pricing. While slowing sequentially, the result is solid, particularly given the infant formula disruptions experienced during the period. Shares surged 7% at the market open on April 23.

Nestle reported organic sales growth of 4%, slowing sequentially as volume and mix eased to 1.3% from 1.5% a quarter earlier. Results came in slightly ahead of the company-compiled consensus, with shares up around 3% intraday on Feb. 19.

Nestle has faced challenges in delivering volume growth in recent years, largely due to multiple rounds of sizable price increases that have weighed on consumer sentiment, coupled with operational shortcomings. These included underwhelming innovation efforts, inconsistent execution with market share losses in some key business areas, and insufficient marketing investment behind strategic priorities.

Nestlé reported nine-month organic sales growth of 3.3%, with real internal growth (volume and mix) turning positive in the third quarter. New CEO Philipp Navratil announced a set of priorities, including a target of cutting 16,000 roles. Shares were up 8% in early trading on Oct. 16.

Nestlé announced the dismissal of CEO Laurent Freixe and appointment of Philipp Navratil, executive VP and CEO of Nespresso, as companywide CEO. Freixe had been CEO for only one year and was dismissed following an investigation into an undisclosed romantic relationship with a subordinate.

Nestle has faced challenges in delivering volume growth in recent years, largely due to multiple rounds of sizable price increases that have weighed on consumer sentiment, coupled with operational shortcomings. These included underwhelming innovation efforts, inconsistent execution with market share losses in some key business areas, and insufficient marketing investment behind strategic priorities.

Nestlé reported first-half 2025 organic sales growth of 2.9%, slightly ahead of the 2.8% company-complied consensus. However, real internal growth (volume and mix) turned negative in the second quarter. The company confirmed the full-year 2025 guidance. Shares were down 4% on July 24.

Nestlé reported first-quarter 2025 organic sales growth of 2.8%, ahead of 2.5% company-compiled consensus, driven by pricing. The company confirmed full-year 2025 guidance. The share price was slightly down in early trading on April 24.

We are transferring coverage of Nestle, the world's largest packaged foods and beverage company. Nestle operates a broad brand portfolio spanning categories such as coffee, confectionery, pet care, and nutrition, with limited reliance on any single brand or product segment.

Nestle has faced challenges in delivering volume growth in recent years, largely due to multiple rounds of sizable price increases that have weighed on consumer sentiment, coupled with operational shortcomings. These included underwhelming innovation efforts, inconsistent execution with market share losses in some key business areas, and insufficient marketing investment behind strategic priorities.

Nestlé reported 2024 organic sales growth of 2.2%, slightly above company-compiled consensus of 2.1%. This was driven by stronger-than-expected real internal growth (volume and mix effect), which accelerated in the fourth quarter to an estimated 1.6% from 0.5% for the first nine months.

Nestlé's capital markets day delivered a conservative update to the midterm organic sales growth and operating margin guidance. The company hopes to rekindle volume growth by stepping up targeted marketing investment, financed by savings and a renewed focus on execution.

Nestle reported nine-month organic sales growth of 2.0% (real internal growth of 0.5% and pricing up 1.6%), below the company-compiled consensus estimate of 2.5%. This was predominantly driven by worse-than-expected real internal growth (0.3% below consensus), which included a 60-basis-point negative impact from customer inventory management actions, particularly in the Americas. Given soft consumer demand and flattening pricing, full-year guidance was reduced once again with management now expecting organic sales growth of around 2%, from more than 3% previously, and flat EPS versus a mid-single-digit increase previously. Guidance for the underlying operating margin was also reduced to around 17%; previously the company expected a moderate increase compared with the 17.3% reported in 2023. The second-half margin is lower than expected given the negative operating leverage from the weaker top line and some input cost increases coming through, particularly for coffee. We trim our fair value estimates for Nestle to CHF 100/$116 from CHF 105/$120 to account for lower 2024 organic growth and margin guidance, and currency movements.

Although Nestle's performance during the pandemic has been nothing short of stellar, we believe the main drivers of this outperformance have been fueled by pandemic-led lockdowns—millions of households have adopted pets, and consumption of coffee at home has been boosted by work-from-home trends. While we don't expect a complete reversal of these trends in the future, we do expect outperformance to be less pronounced in the years ahead. We expect organic growth to slow toward the 5% level by the end of our explicit forecast period.

On Aug. 22, Nestlé announced the appointment of Laurent Freixe, executive vice president and CEO of Zone Latin America, as companywide CEO following Mark Schneider's decision to step down. This leadership transition comes as a surprise, given Schneider's pivotal role in reshaping Nestlé over the past eight years. Despite the company’s recent share price underperformance, Schneider’s tenure has been marked by significant strategic initiatives, including targeted acquisitions, divestments, and the creation of the consumer health science division, in addition to sharpening the company’s focus on core categories, particularly petcare and coffee.

Nestle reported half-year fiscal 2024 results that included organic growth of 2.1% (real internal growth of positive 0.1% and pricing up 2%), below the company-compiled consensus estimate of 2.5%, driven predominantly by worse-than-expected pricing (positive 2% versus positive 3% for consensus). The underlying 17.4% trading operating margin was ahead of the 17.2% consensus expectation. Regionally, real internal growth (volume and mix effect) was positive in emerging markets and slightly negative in developed markets despite pricing slowing down across all geographies. At the product category level, water and prepared dishes, and cooking aids had the weakest real internal growth in fiscal 2023, down 0.8% and 3%, respectively.

Although Nestle's performance during the pandemic has been nothing short of stellar, we believe the main drivers of this outperformance have been fueled by pandemic-led lockdowns—millions of households have adopted pets, and consumption of coffee at home has been boosted by work-from-home trends. While we don't expect a complete reversal of these trends in the future, we do expect outperformance to be less pronounced in the years ahead. We expect organic growth to slow toward the 5% level by the end of our explicit forecast period.

Nestle reported a first-quarter trading update that included organic growth of 1.4%—real internal growth, or RIG, of negative 2.0% and pricing up 3.4%—which was below company-compiled consensus estimates of 2.9% and driven predominantly by the worse-than-expected RIG (down 0.5% for consensus, a 150-basis-points miss).